fraud

If you think you have been contacted about a scam or believe you have paid money to fraudsters, read the info below to confirm. If you are a victim and have been scammed learn how to report a fraud and protect yourself from further losses.

Investment scams are designed to appear just like genuine investments. Fake companies and fraudsters that run investment scams are highly skilled and experienced at persuading their targets (victims) to invest money.

To give you some perspective, most fraud victims are highly educated and have experience with good investments. You are NOT alone and it is not your fault — no scammers = no scams.

How to Detect a Fraudster (Scammer)?

• Fraudsters will typically phone you out of the blue and will already know your name and personal information. This is known as a cold call.
• You may just receive an email at first with an offer asking you to respond. They will follow this with a cold call.
• The fraudster will try to quickly build rapport with you, relaxing you and gaining your trust. They will exude over-confidence and may seem to be too formal.
• They may use your first name and will talk about you and your interests, dreams and desires before turning you on to what they want to discuss. Investing Money with them!
• Once they have some level of rapport with you, they will present an investment opportunity of specific commodities including (carbon credits, gold, graphene, jewels, land, rare earth metals, wine) or just shares.
• The offer will be presented with a level of excitement, and with very high returns promised (often up to 30% return on investment) which is intended to get you emotionally charged about the deal on offer, to get you to part with your money.
• Me too! The fraudsters will tell you they have invested in the same investments they are presenting to you and will make up some elaborate story of their successes. These are LIES!
• The scammers will come to you prepared and armed with your personal information, age, income, occupation and often they even know your previous investments and shares you currently hold.
• You will be phoned multiple times with the intention of building a friendly relationship. The more you believe you have a trusted friend giving you professional investment advice, the easier it is for the fraudsters to get you to spend your money with them. The more you invest the more they will phone you.
• The fraudsters will speak like professional brokers and investors themselves, using language and terminology that real investment brokers and investors use.
• You will be given names of real companies and websites to trick you into believing they are a genuine company, with high prestige and are associated with these larger companies. This is social proof and it’s designed to authenticate their offer. But of course it’s all lies!
• Ultimately these individuals are aggressive salesmen with no moral backbone. They don’t care about you, they only want your money. Just say NO and put the phone down.
• They will NOT be listed on the appropriate financial & investment regulatory bodies as a registered and approved company. It’s critical that you confirm this.

A Typical Investment Fraud Looks Like this:

1. Level 1. You Are Sold Fake Shares from one or more fake companies.

2. You realise you have been scammed. You stop paying and you ignore the fraudsters.

3. Level 2. After a period of time another fake company will contact you purporting to be able to get your money back. They will ask for more money in advance – this is the follow-up fraud. This is typically the same fraudsters using a different fake company name. This is the level at which most damage is done and most money is lost — because the investor feels they are in too deep stop investing and they want to recover some money. Be very careful!

If you are victim to fraud, follow the steps below to immediately report a fraud and to protect yourself from further losses. If you want quick action, see the relevant fraud reporting tools on the fraud resources page.

Step 1: Stop Investing!

– If you believe you have been scammed STOP sending money and Do NOT pay any more money to the fraudsters, starting now.

– If you have given your bank account details to the fraudsters, tell your bank immediately. Explain you’re issue and demand they do an immediate ‘money recall’ on your previous payments, as you may be able to get some money back if have sent payments recently.

Step 2: Ignore Phone Calls & Emails

– Ignore all phone calls and emails from the fraudsters. It’s recommended you change your phone number and email address because this will end the calls and emails 100%. Fraudsters are very persistent and will continue to contact you even after you report a fraud. Changing your phone number and/or email will close a negative chapter and give you a new start without the stress of being contacted. Your new chapter starts today…

– Another option — only if you feel emotionally strong enough — is to record phone calls for evidence. But this is not advised as you may be convinced to transfer more money to the fraudsters, which is the worst case scenario. Think carefully about this.

Step 3: Report the Fraud

– Report the fraud immediately to ActionFraud

– Report the fraud to the FCA (Financial Conduct Authority)

– If you are in the USA report a fraud through StopFraud

Step 4: Get Emotional Support

– If you need help emotionally, be strong and please speak with Victim Support. They have professionals who can help you.

– If you know a relative or friend who has been defrauded, they need support not enquiry, do not judge them, ever! They are not to blame, the fraudster is.

Step 5: Avoid being scammed again

– Fraudsters are relentless! If you have been contacted in the past or even invested in the past — no matter how recently — they will contact you again. Be aware and be ready, or better still change your phone number or email to remove them from your life completely.

– Investment Frauds have multiple-levels. If you have lost money to fraud, you will be contacted again by the fraudsters pretending to be from a company who can recover your lost money. They will use multiple strategies to do this. But they can NOT recover you money. You must treat them as the same company who defrauded you the first time and ignore and report them.

Investment scams are designed to look like genuine investments. Fraudsters uses the same language and terms that genuine share brokers use. See the steps below to prevent and avoid investment fraud and scams.

1. Ignore Phone Calls & Emails
If you’ve been cold called (a call out of the blue) or received an email about an investment opportunity, this will be an investment fraud or a scam. Just put the phone down and in future ignore all calls from this number.

Scammers will typically phone from Skype phone numbers and/or hide their phone number. These will show on your phone caller ID as ‘Withheld’, ‘International’ or ‘Unavailable’.

There are other ways callers can look like they are phoning from local areas and aren’t cold calling you. They may refer to a brochure or an email that they have sent you trying to sound professional. Just remember this, “if it looks to good to be true IT probably  IS!”

2. Check the FCA Warning List
If you have been contacted about an investment opportunity you can check the FCA Warning List to see if the fraud company has been listed. But beware this list is not always fully up to date. Fraudsters create many fictitious companies and scams daily and as soon as one is listed on the FCA warning list, another 100 fake companies will probably have been created.

But, if a firm is unauthorised or unregulated then you will have no guarantee and no recourse if things go wrong. For example, if you buy an unregulated investment product from a firm that is not authorised by the FCA, then you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) when you discover it’s a fraud.

3. Looking to Invest? You Find them
If you are looking to invest, it’s critical that you find an FCA authorised and regulated company on the FCA approved and regulated list and not vice versa. Very simply, ensure they are an FCA regulated firm before parting with any cash or your investment is not guaranteed.

4. Check the International Warning List
Is it really worth touching an overseas investment company knowing that fraud is so rife? But if you must, please check the warnings from foreign regulators about firms conducting unauthorised business by using the International Organization of Securities Commission search.

Here is a list of the most common investment frauds and techniques used. What the fraudsters do and how they do it.

Advanced Fee Fraud:

The advance fee fraud is the most common fraud being used today. The fraudster convinces the victim to invest a sum of money with the promise of some sort of future return, often up to 30% return on shares. This return may be in the form of money, product or other benefit. The con artist solicits this money with no intention or ability to deliver the promised return. Investment scams can look and sound believable, with smooth-talking salespeople, slick websites or sophisticated brochures and prospectuses. This can make it hard to tell them apart from genuine investment opportunities. But there are ways to spot and avoid scams. It might be an opportunity to invest in shares, property or rare goods, with the promise that the returns will be high and the risks to your money are low or non-existent. But generally speaking; the bigger the proposed return, the greater the risk. If it sounds too good to be true, IT IS!

Recovery Room Fraud:

This fraud will typically follow an Advance Fee fraud. Let’s for example say you’ve invested money in the first instance and the company you invested with has disappeared, you may email or phone and get no response and this can go on for months. You start to worry and this is where most victims realize they have been defrauded, or at least have a suspicion. Then typically 3-6 months later (sometimes longer) another company will approach you by phone and will tell you some elaborate story about how the first company you invested with went bust or was sold off and your shares can now be recovered. They will often also tell you they can recover the shares and they will be valued higher than your initial purchase. But this comes at a cost — you must pay them up front for the pleasure of recovering your lost commodities or shares.

Of course the story is completely fake and the company calling you will be linked to the first company, often it’s even the same fraudsters contacting you again as part of this recovery scam. They will tease you and tempt you with more stories of higher returns and high stock shares prices and values. But this is where most investors lose the most money and which does the most damage financially and emotionally, because the victim either feels in to deep to stop spending and/or because they are so relieved at getting a sniff at recovering their initial investment back. Its a very powerful fraud strategy.

Reverse Takeover:

This isn’t so much a strategy as a story used to decipher money from you. They can be used as part of an investment scenario to get you to part with your cash based on a fake company being purchased which apparently has shares already on the stock exchange, with the intention of selling these shares to you and generating you high returns.

Other Aggressive Fraud Techniques:

– Fraudsters may tell you your original investment is genuine and demand you do not pull out of the deal. They will reassure you that your original investment is genuine and encourage not to pull out of the deal and may even threaten you with legal action if you stop sending money.
– If you ask for your money back you will be told that you can swap your investment for another deal, with a transfer fee involved or asked to pay a capital gains tax bill before the large profit you were promised can be released to you.